Crosstown Funding Comes With Questions

By Bill Dries

The Memphis City Council’s approval of $15 million in city funding for the Crosstown redevelopment project last December was supposed to be the last piece of a $180 million funding puzzle for the mammoth undertaking.

Shelby County Commissioners have approved $5 million in funding for the Crosstown redevelopment project for infrastructure work.

(Daily News File/Lance Murphey)

So when the administration of Shelby County Mayor Mark Luttrell came to Shelby County Commissioners last week in committee with a $5 million ask in county funds, some on the commission had a lot of questions.

Those questions continued over about two hours Monday, March 10, before the commission eventually approved the public funding.

Other commissioners said the $5 million for infrastructure by the county had always been a part of the project’s financing, the bulk of which is private.

“I’m not real fond of the timing of this project,” Luttrell said as he urged the commission to nevertheless approve the funding. “In a sense, it establishes a precedence of amending the budget in mid-year. … That’s bothersome. I would hope that this is not the catalyst for other attempts to amend a budget in the middle of the (fiscal) year. But it is a time-sensitive issue.”

But Commissioner Mike Ritz, who has consistently voted against such public funding for the conversion of The Pyramid and the Highland Row development near the University of Memphis, termed it a project from “another group of who’s who people in Memphis.”

“They’ve already got a 20-year PILOT,” he added, referring to a payment-in-lieu-of-taxes break approved by the Downtown Memphis Commission.

Commissioner Walter Bailey attempted to amend that 20-year PILOT to a 15-year PILOT, but the county attorney’s office ruled the commission has no authority over the tax break approved by the Downtown Memphis Commission and cannot change terms of a PILOT.

Ritz was also critical of founding partners in the project from Methodist Le Bonheur Healthcare and St. Jude Children’s Research Hospital who didn’t support the proposed half-cent increase in the county sales tax Ritz advocated for to support public education.

Voters rejected the 2013 referendum measure at the polls.

“We did not get any help from those entities when we tried to do our half-cent sales tax to help public schools – no help,” he said. “And now these founding partners want our help. I can’t go there, commissioners. I just can’t do it.”

McLean Wilson of the development team said the county funding will be used toward the end of the project’s construction timeline, which calls for a 2015 opening. And the funding resolution indicates the infrastructure uses for the money will include some demolition as well as work on the public parking garage.

Luttrell said his administration has identified where some of the $5 million will come from, but not all of it at this point.

“We cannot invest county dollars in a for-profit relationship,” Luttrell said. “It’s got to be focused on infrastructure issues, issues of common use by the entire community. … We are asking the management team of this project to bring their projects to us … to determine whether it’s a legitimate investment.”

Commissioner Heidi Shafer described Crosstown as “a project that needs to move forward” and will help with blight issues in the surrounding neighborhoods.

She also said a delay might prompt other commissioners to seek additional county funding for projects in their districts.

“We don’t have that much money,” she said. “It would probably sink this project. I would urge us to resist that.”

As the commission debated Monday, at least one Memphis City Council member was doing a different kind of math.

“So Memphis chips in another $3.5 (million) for this project,” council member Harold Collins tweeted, referring to his calculation of the share of the county funding represented by the percentage of Shelby County residents who live within Memphis.

Ritz was the only “no” vote on the funding, which he said at the outset of Monday’s debate wasn’t a vote against the project.

“I’m not against this project at all. I think we ought to support the project,” he said. “But I think supporting the project and putting money in it are different things. There will be a groundbreaking whether we play or not. I’m absolutely convinced of that, no matter what they say. Five million dollars on a project of this size is not that big a deal. If they really thought our money was important, they’d have come to us a year and a half ago and told us how important we were.”